THE HIND CYCLES LIMITED AND SEN-RALEIGH LIMITED (NATIONALISATION) 
ACT, 1980 
_______ 

ARRANGEMENT OF SECTIONS 
________ 

SECTIONS 

1.  Short title and commencement. 
2.  Definitions. 

CHAPTER I 

PRELIMINARY 

CHAPTER II 

ACQUISITION OF THE UNDERTAKINGS OF THE TWO COMPANIES 
3.  Transfer to, and vesting in, the Central Government of the undertakings of the two companies. 
4.  General effect of vesting. 
5.  Owners of the two Companies to be liable for certain prior liabilities. 
6.  Power of Central Government to direct vesting of the undertakings of the two companies in two 

Government Companies. 

7.  Payment of amount. 
8.  Payment of further amounts. 

CHAPTER III 

PAYMENT OF AMOUNTS 

CHAPTET IV 

MANAGEMENT, ETC., OF THE UNDERTAKINGS OF THE TWO COMPANIES 

9.  Management, etc., of the undertakings of the two companies. 
10.  Duty of persons in charge of management of the undertakings of the two companies to deliver all 

assets, etc. 

11.  Duty of persons to account for assets, etc., in their possession. 
12.  Accounts and audit. 

PROVISIONS RELATING TO EMPLOYEES OF THE TWO COMPANIES 

CHAPTER V 

13.  Continuance of employees 
14.  Provident fund and other funds. 

CHAPTET VI 

COMMISSIONER OF PAYMENTS 

15.  Appointment of Commissioner of Payments. 
16.  Payment by Central Government to the Commissioner. 
17.  Certain powers of Central Government or Government companies. 
18.  Claims to be made to the Commissioner. 
19.  Priority of claims. 
20.  Examination of claims. 
21.  Admission or rejection of the claims. 
22.  Disbursement of money by the Commissioner. 

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SECTIONS 

23.  Disbursement of amounts to the two companies. 
24.  Undisbursed or unclaimed amount to be deposited with the general revenue account. 

25.  Act to have overriding effect. 
26.  Contracts  to  cease  to  have  effect  unless  ratified  by  the  Central  Government  or  Government 

CHAPTER VII 

MISCELLANEOUS 

companies. 

27.  Penalties. 
28.  Offences by companies. 
29.  Protection of action taken in good faith. 
30.  Delegation of powers. 
31.  Power to make rules. 
32.  Power to remove difficulties. 
33.  Repeal and saving. 

THE FIRST SCHEDULE. 
THE SECOND SCHEDULE. 
THE THIRD SCHEDULE. 

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THE HIND CYCLES LIMITED AND SEN-RALEIGH LIMITED (NATIONALISATION)              

ACT, 1980 

ACT NO. 70 OF 1980 

[27th December, 1980.] 

An Act to provide for the acquisition of the undertakings of the Hind Cycles Limited, and Sen-Raleigh 
Limited, with a view to securing the proper management of such undertakings so as to subserve the 
interests of the general public by ensuring the continued manufacture, production and distribution of 
bicycles, and their component parts and accessories which are essential to the needs of the economy 
of the country and for matters connected therewith or incidental thereto. 

WHEREAS  Hind  Cycles  Limited  and  Sen-Raleigh  Limited  had  been  engaged  in  the  manufacture 
production  of  articles  mentioned  in  the  First  Schedule  to  the  Industries  (Development  and  Regulation) 
Act, 1951(65 of 1951), namely, bicycle and their component parts and accessories; 

AND  WHEAREAS  the  management  of  the  undertakings  of  Hind  Cycles  Limited  and  Sen-Raleigh 
Limited were taken over by the Central Government under the provisions of the Industries (Development 
and Regulation) Act, 1951(65 of 1951); 

AND WHEAREAS it is necessary to acquire the undertakings of Hind Cycles Limited and Sen-Raleigh 
Limited  to  ensure  that  the  interests  of  the  general  public  are  served  by  the  continuance,  by  the 
undertakings  of  the  two  companies,  of  the  manufacture,  production  and  distribution  of  the  aforesaid 
articles which are essential to the needs of the economy of the country; 

BE it enacted by Parliament in the Thirty-first Year of the Republic of India as follows:— 

CHAPTER I 

PRELIMINARY 

1.  Short  title  and  commencement.—(1)  This  Act  may  be  called  the  Hind  Cycles  Limited  and             

Sen-Raleigh Limited (Nationalisation) Act, 1980. 

(2) It shall be deemed to have come into force on the 15th day of October, 1980. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “appointed day” means the 15th day of October, 1980; 

(b) “Commissioner” means the Commissioner of Payments appointed under section 15; 

(c) “Custodian” means the Custodian appointed under sub-section (2) of section 9 to take over, or 

carry on, the management of the undertakings of either, or both, of the two companies; 

(d) “notification” means a notification published in the Official Gazette; 

(e) “prescribed” means prescribed by rules made under this Act; 

(f) “Sen-Raleigh Limited” includes Sen and Pandit Industries Limited, Ancillary Industries (Lugs) 
Private  Limited,  Ancillary  Industries  (Forgings)  Private  Limited,  Ancillary  Industries  (Cranks) 
Private  Limited  and  Naokhali  Machine  Tools  Limited,  all  having  their  registered  offices  at  1, 
Middeton Street, Calcutta; 

(g)  “specified  date”,  in  relation  to  any  provision  of  this  Act,  means  such  date  as  the  Central 
Government may, by notification, specify for the purposes of that provision and different dates may 
be specified for different provisions of this Act; 

(h) “two companies” means Hind Cycles Limited and Sen-Raleigh Limited, being companies as 
defined  in  the  Companies  Act,  1956  (1  of  1956),  and  having  their  registered  offices  at  Birlagram, 
Nagda (Madhya Pradesh), and 1, Middleton Street, Calcutta, respectively; 

(i) words and expressions used herein and not defined but defined  in the Companies Act, 1956           

(1 of 1956), shall have the meanings respectively assigned to them in that Act. 

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CHAPTER II 

ACQUISITION OF THE UNDERTAKINGS OF THE TWO COMPANIES 

3.  Transfer  to,  and  vesting  in,  the  Central  Government  of  the  undertakings  of  the  two 
companies.—On the appointed day, the undertakings of each of the two companies, and the right, title 
and  interest  of  each  of  the  two  companies  in  relation  to  such  undertakings,  shall,  by  virtue  of  the  Act, 
stand transferred to, and shall vest in, the Central Government. 

4. General effect of vesting.—(1) The undertakings of each company referred to in section 3 shall be 
deemed  to  include  all  assets,  rights,  lease-holds,  powers,  authorities  and  privileges,  and  all  property, 
movable  and  immovable,  including  lands,  buildings,  workshops,  stores,  instruments,  machinery  and 
equipment, cash balances, cash on hand, cheques, demand drafts, reserve funds, investments, book debts, 
and  all  other  rights  and  interest  in,  or  arising  out  of,  such  property  as  were  immediately  before  the 
appointed day in the ownership, possession, power or control of such company whether within or outside 
India, and all books of account, registers and all other documents of whatever nature relating thereto, and 
shall also be deemed to include the liabilities specified in sub-section (2) of section 5. 

(2) All properties as aforesaid which have vested in the Central Government under section 3 shall, by 
force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all 
other  encumbrances  affecting  them,  and  any  attachment,  injunction,  decree  or  order  of  any  court 
restricting the use of such properties in any manner or appointing any receiver in respect of the whole or 
any part of such properties shall be deemed to have been withdrawn. 

(3) Every mortgagee of any property which has vested under this Act in the Central Government and 
every person holding any charge, lien or other interest in, or in relation to, any such property shall give, 
within such time and in such manner as may be prescribed, an intimation to the Commissioner of such 
mortgage, charge, lien or other interest. 

(4) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in 
sub-section (3) or any other person holding any charge, lien or other interest in, or in relation to, any such 
property shall be entitled to claim, in accordance with his rights and interests, payment of the mortgage 
money or other dues, in whole or in part, out of the amount specified, in relation to the company owning 
such property, in the First Schedule, and also out of the amounts determined under  section 8, but no such 
mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the 
Central Government. 

(5)  Any  licence  or  other  instrument  granted  to  either  of  the  two  companies  in  relation  to  any 
undertaking which has vested in the Central Government under section 3 at any time before the appointed 
day  and  in  force  immediately  before  that  day  shall  continue  to  be  in  force  on  and  after  such  day  in 
accordance with its tenor in relation to and for the purposes of such undertaking, and, on and from the 
date  of  vesting  of  such  undertaking  under  section  6  in  a  Government  company,  such  Government 
company shall be deemed to be substituted in such licence or other instrument as if such licence or other 
instrument had been granted to such Government company and such Government company shall hold it 
for the remainder of the period for which the company to which it was granted would have held it under 
the terms thereof. 

(6) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any 
matter  specified  in  sub-section  (2)  of  section  5,  in  respect  of  any  undertaking  of  either  of  the  two 
companies, instituted or preferred by or against either of the two companies, is pending, the same shall 
not  abate,  be  discontinued  or  be,  in  any  way,  prejudicially  affected  by  reason  of  the  transfer  of  the 
undertakings of either of two companies or of anything contained in this Act, but the suit, appeal or other 
proceeding may be continued, prosecuted or enforced by or against the Central Government, or, where the 
undertakings of the two companies are directed, under section 6, to vest in Government Companies, by or 
against the concerned Government company. 

5.  Owners  of  the  two  Companies  to  be  liable  for  certain  prior  liabilities.—(1)  Every  liability, 
other than the liability specified in sub-section (2), of each of the two companies in respect of any period  

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prior  to  the  appointed  day,  shall  be  the  liability  of  the  concerned  company  and  shall  be  enforceable 
against it and not against the Central Government, or, where the undertakings of the two companies are 
directed under section 6, to vest in Government companies, against the concerned Government company. 

(2)  Any  liability  arising  in  respect  of  materials  supplied  to  either  of  the  two  companies  after  the 
management of the undertakings of the Company had been taken over by the Central Government shall, 
on  and  from  the  appointed  day,  be  the  liability  of  the  Central  Government  or  of  the  concerned 
Government company aforesaid, and shall be discharged by that Government or Government Company, 
as and when repayment for such supplies becomes due and payable. 

(3) For the removal of doubts, it is hereby declared that— 

(a) save as otherwise expressly provided in this section or in any other provision of this Act, no 
liability, other than the liability specified in sub-section (2), of either of the two companies in relation 
to its undertakings in respect of any period prior to the appointed day, shall be enforceable against the 
Central Government, or, where the undertakings of the two companies are directed, under section 6, 
to vest in Government companies, against the concerned Government company; 

(b)  no  award,  decree  or  order  of  any  court,  tribunal  or  other  authority  in  relation  to  the 
undertakings of either of the two companies, passed on or after the appointed day, in respect of any 
matter, claim or dispute, not being a matter, claim or dispute in relation to any matter referred to in 
sub-section (2), which arose before that day, shall be enforceable against the Central Government, or, 
where  the  undertakings  of  the  two  companies  are  directed,  under  section  6,  to  vest  in  Government 
companies, against the concerned Government company; 

(c)  no  liability  incurred  by  either  of  the  two  companies  before  the  appointed  day,  for  the 
contravention  of  any  provision  of  law  for  the  time  being  in  force,  shall  be  enforceable  against  the 
Central Government, or, where the undertakings of the two companies are directed, under section 6, 
to vest in Government companies, against the concerned Government company. 

6. Power of Central Government to direct vesting of the undertakings of the two Companies in 
two Government Companies.—(1) Notwithstanding anything contained in sections 3 and 4, the Central 
Government  may,  subject  to  such  terms  and  conditions  as  it  may  think  fit  to  impose,  direct,  by 
notification, that each of the undertakings of the two companies and the right, title and interest of each of 
the  two  companies  in  relation  to  their  respective  undertakings  which  have  vested  in  that  Government 
under section 3, and such of the liabilities of each of the two companies as are specified in sub-section (2) 
of  section  5,  shall,  instead  of  continuing  to  vest  in  the  Central  Government,  vest  in  two  Government 
companies either on the date of the notification or on such earlier or later date (not being a date earlier 
than the appointed day) as may be specified in the notification. 

(2) Where the right, title and interest, and the liabilities referred to in sub-section (2) of section 5, of 

each  of  the  two  companies,  in  relation  to  its  undertakings,  vest  in  two  Government  companies  under            
sub-section  (1),  the  Government  companies  shall,  on  and  from  the  date  of  such  vesting,  be  deemed  to 
have  become  owners  in  relation  to  such  undertakings,  and  all  the  rights  and  liabilities  of  the  Central 
Government in relation to such undertakings shall, on and from the date of such vesting, be deemed to 
have become the rights and liabilities, respectively, of the Government companies. 

CHAPTER III 

PAYMENT OF AMOUNTS 

 7.  Payment  of  amount.—For  the  transfer  to,  and  vesting  in,  the  Central  Government,  under          

section 3, of the undertakings of each of the two companies and the right, title and interest of each of the 
two companies in relation to such undertakings, there shall be given by the Central Government to each of 
the  companies,  in  cash  and  in  the  manner  specified  in  Chapter  VI,  an  amount  equal  to  the  amount 
specified against the name of such company in the First Schedule. 

8. Payment of further amounts.—(1) For the deprivation of the two companies of the management 
of their undertakings, there shall be given by the Central Government to each of the companies in cash, an 
amount calculated at the rate specified against the name of such company in the Second Schedule for the 

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period  commencing  on  the  date  on  which  the  management  of  the  undertakings  of  such  company  was 
taken  over  in  pursuance  of  the  orders  made  by  the  Central  Government  under  the  provisions  of  the 
Industries (Development and Regulation) Act, 1951(65 of 1951) and ending on the appointed day. 

(2) The amount specified in section 7 and the amount calculated in accordance with the provisions of 
sub-section  (1)  shall  carry  simple  interest  at  the  rate  of  four  per  cent.  per  annum  for  the  period 
commencing on the appointed day and ending on the date on which payment of such amount is made by 
the Central Government to the Commissioner. 

(3) The  amounts  determined  in  accordance  with  the provisions  of  sub-sections (1)  and  (2)  shall  be 
given by the Central Government to the two companies in addition to the amount specified in the First 
Schedule. 

MANAGEMENT, ETC., OF THE UNDERTAKINGS OF THE TWO COMPANIES 

CHAPTET IV 

9.  Management, etc.,  of  the  undertakings  of  the  two  companies.—The  general  superintendence, 
direction,  control  and  management  of  the  affairs  and  business  of  the  undertakings  of  each  of  the  two 
companies, the right, title and interest in relation to which have vested in the Central Government under 
section 3, shall,— 

(a)  where  a  direction  has  been  made  by  the  Central  Government  under  sub-section  (1)  of            

section 6, vest in the Government company specified in such direction; or 

(b)  where  no  such  direction  has  been  made  by  the  Central  Government,  vest  in  one  or  more 

Custodians appointed by the Central Government under sub-section (2), 

and thereupon the Government company so specified or the Custodian or Custodians so appointed, as the 
case may be, shall be entitled to exercise, to the exclusion of all other persons, all such powers and do all 
such things as either, or both, of the two companies is or are, authorised to exercise and do in relation to 
its or their undertakings. 

(2) The Central Government may appoint one or more individuals or a Government company as the 
Custodian or Custodians of the undertakings of either, or both, of the two companies in relation to which 
no direction has been made by it under sub-section (1) of section 6. 

(3) The Custodian or Custodians so appointed shall receive, from the funds of the undertakings of the 
two companies, such remuneration as the Central Government  may fix and shall hold office during the 
pleasure of the Central Government. 

10.  Duty  of  persons  in  charge  of  management  of  the  undertakings  of  the  two  companies  to 
deliver all assets, etc.—(1) On the vesting of the management of the undertakings of the two companies 
in Government companies or on the appointment of a Custodian or Custodians, all persons in charge of 
the management of the undertakings of either of the two companies immediately before such vesting or 
appointment,  shall  be  bound  to  deliver  to  the  concerned  Government  company  or  the  Custodian  or 
Custodians, as the case may be, all assets, books of account, registers or other documents in their custody 
relating to the undertakings. 

(2) The Central Government may issue such directions as it may deem desirable in the circumstances 
of  the  case  to  the  Government  companies  or    the  Custodian  or  Custodians,  and  such  Government 
companies  or the Custodian or Custodians may also, if it is considered necessary so to do, apply to the 
Central  Government  at  any  time  for  instructions  as  to  the  manner  in  which  the  management  of  the 
undertakings  of  the  two  companies  shall  be  conducted  or  in  relation  to  any  other  matter  arising  in  the 
course of such management. 

11. Duty of persons to account for assets, etc., in their possession.—(1) Any person who has, on 
the  appointed  day,  in  his  possession  or  under  his  control  any  assets,  books,  documents  or  other  papers 
relating to any undertaking owned by the two companies, which have vested in the Central Government 
or in Government companies under this Act, and which belong to the two companies, or would have so 
belonged, if the undertakings owned by the two companies had not vested in the Central Government or 
such Government companies, shall be liable to account for the said assets, books, documents and other 

6 

 
papers to the Central Government or the Government companies and shall deliver them up to the Central 
Government or such Government companies or to such person or persons as the Central Government or 
the concerned Government company may specify in this behalf. 

(2) The Central Government or the Government companies aforesaid may take or cause to be taken 
all necessary steps for securing possession of the undertakings of the two companies which have vested in 
the Central Government or the Government companies under this Act. 

(3) The two companies shall within such period as the Central Government may allow in this behalf, 
furnish to  that  Government  a  complete inventory  of  all their  properties  and  assets,  as  on  the  appointed 
day, pertaining to the undertakings which have vested in the Central Government under section 3, and, for 
this  purpose,  the  Central  Government  or  the  Government  companies  aforesaid  shall  afford  to  the  two 
companies all reasonable facilities. 

12. Accounts and audit.—The Custodian or Custodians of the undertakings of either, or both, of the 
two companies shall maintain an account of the undertakings of the concerned company or companies in 
such  form  and  manner  and  under  such  conditions  as  may  be  prescribed  and  the  provisions  of  the 
Companies Act, 1956 (1 of 1956), shall apply to the audit of the accounts so maintained as they apply to 
the audit of the accounts of a company. 

CHAPTER V 

PROVISIONS RELATING TO EMPLOYEES OF THE TWO COMPANIES 

13. Continuance of employees.—(1) Every person who has been, immediately before the appointed 

day, employed in any undertaking of either of the two companies shall become,— 

(a) on and from the appointed day, an employee of the Central Government, and 

(b)  where  the  undertakings  of  the  two  companies  are  directed,  under  sub-section  (1)  of                   

section 6, to vest in Government Companies, an employee of the concerned Government company on 
and from the date of such vesting or transfer; 

and shall hold office or service under the Central Government or the concerned Government company, as 
the case may be, with the same rights and privileges as to pension, gratuity and other matters as would 
have been admissible to him if there had been no such vesting and shall continue to do so unless and until 
his employment under the Central Government or the concerned Government company, as the case may 
be,  is  duly  terminated  or  until  his  remuneration  and other  conditions  of  service  are  duly  altered  by  the 
Central Government or the Concerned Government company, as the case may be. 

(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in any 
other law for the time being in force, the transfer of the services of any officer or other person employed 
in any undertaking of either of the two companies, to the Central Government or a Government company, 
shall not entitle such officer or other employee to any compensation under this Act or any other law for 
the time being in force and no such claim shall be entertained by any court, tribunal or other authority. 

14.  Provident  fund  and  other  funds.—(1)  Where  either  of  the  two  companies  has  established  a 
provident fund, superannuation, welfare or other fund for the benefit of the persons employed in any of its 
undertakings,  the  moneys  relatable  to  the  officers  or  other  employees  whose  services  have  become 
transferred  by  or  under  this  Act  to  the  Central  Government  or  Government  company  shall,  out  of  the 
moneys standing, on the appointed day, to the credit of such provident fund, superannuation, welfare or 
other  fund,  stand  transferred  to,  and  vest  in,  the  Central  Government  or  the  concerned  Government 
company, as the case may be. 

(2)  The  moneys  which  stand  transferred  under  sub-section  (1)  to  the  Central  Government  or  the 
Government  company,  as  the  case  may  be,  shall  be  dealt  with  by  that  Government  or  Government 
company in such manner as may be prescribed. 

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CHAPTET VI 

COMMISSIONER OF PAYMENTS 

15.  Appointment  of  Commissioner  of  Payments.—(1)  The  Central  Government  shall,  for  the 
purpose  of  disbursing  the  amounts  payable  under  sections  7  and  8  to  each  of  the  two  companies,  by 
notification, appoint a Commissioner of Payments. 

(2)  The  Central  Government  may  appoint  such  other  persons  as  it  may  think  fit  to  assist  the 
Commissioner  and  thereupon  the  Commissioner  may  authorise  one  or  more  of  such  persons  also  to 
exercise  all  or  any  of  the  powers  exercisable  by  him  under  this  Act  and  different  persons  may  be 
authorised to exercise different powers. 

(3)  Any  person  authorised  by  the  Commissioner  to  exercise  any  of  the  powers  exercisable  by  the 
Commissioner may exercise those powers in the same manner and with the same effect as if they have 
been conferred on that person directly by this Act and not by way of authorisation. 

(4) The salaries and allowances of the Commissioner and other persons appointed under this section 

shall be defrayed out of the Consolidated Fund of India. 

16. Payment by Central Government to the Commissioner.—(1) The Central Government shall, 
within thirty days from the specified date, pay in cash to the Commissioner, for payment to each of the 
two companies,— 

(a)  an  amount  equal  to  the  amount  specified  against  the  name  of  such  company  in  the  First 

Schedule; and 

(b) an amount equal to the amount payable to each of the two companies under section 8. 

(2) A deposit account shall be opened by the Central Government in favour of the Commissioner in 
the Public Account of India and every amount paid under this Act to the Commissioner shall be deposited 
by  him  to  the  credit  of  the  said  deposit  account  and  the  said  deposit  account  shall  be  operated  by  the 
Commissioner. 

(3) Separate records shall be maintained by the Commissioner in respect of the undertakings of each 

of the two companies in relation to which payments have been made to him under this Act. 

(4)  Interest  accruing  on  the  amount  standing  to  the  credit  of  the  deposit  account  referred  to  in                    

sub-section (2) shall enure to the benefit of the two companies. 

17.  Certain  powers  of  Central  Government  or  Government  companies.—(1)  The  Central 
Government or the concerned Government company, as the case may be, shall be entitled to receive up to 
the specified date, to the exclusion of all other persons, any money due to either of the two companies in 
relation to the undertakings which have vested in the Central Government or the Government company 
and realised after the appointed day, notwithstanding that the realisation pertains to a period prior to the 
appointed day. 

(2) The Central Government, or the concerned Government company, as the case may be, may make 
a  claim  to  the  Commissioner  with  regard  to  every  payment  made  by  that  Government  or  Government 
company after the appointed day, for discharging any liability of either of the two companies, not being 
any liability specified in sub-section (2) of section 5, in relation to any period prior to the appointed day, 
and every such claim shall have priority, in accordance with the priorities attaching, under this Act, to the 
matter  in  relation  to  which  such  liability  has  been  discharged  by  the  Central  Government  or  the 
Government company. 

(3) Save as otherwise provided in this Act, the liabilities or either of the two companies in respect of 
any transaction prior to the appointed day which have not been discharged on or before the specified date 
shall be the liabilities of the respective company. 

18. Claims to be made to the Commissioner.—Every person having a claim against either of the 
two  companies  with  regard  to  any  of  the  matters  specified  in  the  Third  Schedule  pertaining  to  any 
undertaking  owned  by  it  shall  prefer  such  claim  before  the  Commissioner  within  thirty  days  from  the 
specified date: 

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Provided  that  if  the  Commissioner  is  satisfied  that  the  claimant  was  prevented  by  sufficient  cause 
from preferring the claim within the said period of thirty days, he may entertain the claim within a further 
period of thirty days, but not thereafter. 

19. Priority of claims.—The claims made under section 18 shall have priorities in accordance with 

the following principles, namely:— 

(a)  Category  I  shall  have  precedence  over  all  other  categories  and  Category  II  shall  have 

precedence over Category III, and so on; 

(b) the claims specified in each of the categories shall rank equally and be paid in full, but, if the 
amount is insufficient to meet such claims in full, they shall abate in equal proportions and be paid 
accordingly; and 

(c) the question of discharging any liability with regard to a matter specified in a lower category 
shall arise only if a surplus is left after meeting all the liabilities specified in the immediately higher 
category. 

20. Examination of claims.—(1) On receipt of the claims made under section 18, the Commissioner 
shall arrange the claims in the order of priorities specified in the Third Schedule and examine the same in 
accordance with such order. 

(2)  If,  on  examination  of  the  claims,  the  Commissioner  is  of  opinion  that  the  amount  paid  to  him 
under  this  Act  is  not  sufficient  to  meet  the  liabilities  specified  in  any  lower  category,  he  shall  not  be 
required to examine the claims in respect of such lower category. 

21.  Admission  or  rejection  of  claims.—(1)  After  examining  the  claims  with  reference  to  the 
priorities  specified  in  the  Third  Schedule,  the  Commissioner  shall  fix  a  date  on  or  before  which  every 
claimant shall file the proof of his claim. 

(2) Not less than  „fourteen days‟ notice of the date so fixed shall be given by advertisement in one 
issue of any daily newspaper in the English language having circulation in the major part of the country 
and  in  one  issue  of  any  daily  newspaper  in  such  regional  language  as  the  Commissioner  may  consider 
suitable,  and  every  such  notice  shall  call  upon  the  claimant  to  file  the  proof  of  his  claim  with  the 
Commissioner within the period specified in the advertisement. 

(3)  Every  claimant  who  fails  to  file  the  proof  of  his  claim  within  the  period  specified  by  the 

Commissioner shall be excluded from the disbursements made by the Commissioner. 

(4) The  commissioner  shall,  after  such  investigation as  may,  in  his  opinion,  be  necessary  and  after 
giving  the  concerned  company  an  opportunity  of  refuting  the  claim  and  after  giving  the  claimant  a 
reasonable opportunity of being heard, by order in writing, admit or reject the claim in whole or in part. 

(5) The Commissioner shall have the power to regulate his own procedure in all matters arising out of 
the discharge of his functions including the place or places at which he may hold his sitting and shall, for 
the  purpose of  making  any  investigation  under  this  Act,  have  the  same  powers as  are  vested in  a  Civil 
Court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following 
matters, namely:— 

(a) the summoning and enforcing the attendance of any witness and examining him on oath; 

(b)  the  discovery  and  production  of  any  document  or  other  material  object  producible  as 

evidence; 

(c) the reception of evidence on affidavits; 

(d) the issuing of any commission for the examination of witnesses. 

(6) Any investigation before the Commissioner shall be deemed to be a judicial proceeding within the 
meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860) and the Commissioner shall be 
deemed to be a Civil Court for the purposes of section 195, and Chapter XXVI, of the Code of Criminal 
Procedure, 1973 (2 of 1974 ). 

9 

 
(7)  A  claimant  who  is  dissatisfied  with  the  decision  of  the  Commissioner,  may  prefer  an  appeal 
against such decision to the principal civil court of original jurisdiction within the local limits of whose 
jurisdiction the registered office of the concerned company is situated: 

Provided that where a person who is a Judge of a High Court is appointed to be the Commissioner, 
such  appeal,  shall  lie  to  the  High  Court  exercising  jurisdiction  over  the  place  in  which  the  registered 
office of the concerned company is situated and such appeal shall be heard and disposed of by not less 
than two Judges of that High Court. 

22.  Disbursement  of  money  by  the  Commissioner.—After  admitting  a  claim  under  this  Act,  the 
amount due in respect of such claim shall be paid by the Commissioner to the person or persons to whom 
such amount is due, and on such payment, the liability of each of the two companies in respect of such 
claim shall stand discharged. 

23.  Disbursement  of  amounts  to  the  two  companies.—(1)  If,  out  of  the  moneys  paid  to  him  in 
relation  to  the  undertakings  of  either  of  the  two  companies,  there  is  a  balance  left  after  meeting  the 
liabilities  as  specified  in  the  Third  Schedule,  the  Commissioner  shall  disburse  such  balance  to  the 
concerned company. 

(2)  Where  the  possession  of  any  machinery,  equipment  or  other  property  has  vested  in  the  Central 
Government or a Government company under this Act, but such machinery, equipment or other property 
does  not  belong  to  either  of  the  two  companies,  it  shall  be  lawful  for  the  Central  Government  or  the 
concerned Government company, to continue to possess such machinery or equipment or other property 
on  the  same  terms  and  conditions  under  which  they  were  possessed  by  either  of  the  companies 
immediately before the appointed day. 

24. Undisbursed or unclaimed amount to be deposited with the general revenue account.—Any 
money  paid  to  the  Commissioner  which  remains  undisbursed  or  unclaimed  on  the  date  immediately 
preceding the date on which the office of the Commissioner is finally wound up, shall be transferred by 
the  Commissioner,  before  his  office  is  finally  would  up,  to  the  general  revenue  account  of  the  Central 
Government; but a claim to any money so transferred may be preferred to the Central Government by the 
person  entitled  to  such  payment  and  shall  be  dealt  with  as  if  such  transfer  had not  been  made,  and  the 
order, if any, for the payment of the claim being treated as an order for the refund of revenue. 

CHAPTER VII 

MISCELLANEOUS 

25.  Act  to  have  overriding  effect.—The  provisions  of  this  Act  shall  have  effect  notwithstanding 
anything inconsistent therewith in any other law for the time being in force or in any instrument having 
effect by virtue of any law, other than this Act, or in any decree or order of any court, tribunal or other 
authority. 

26.  Contracts  to  cease  to  have  effect  unless  ratified  by  Central  Government  or  Government 
companies.—Every  contract  entered  into  by  either  of  the  two  companies  in  relation  to  any  of  its 
undertakings which has vested in the Central Government under section 3 for any service, sale or supply, 
and in force immediately before the appointed day, shall, on and from the expiry of a period of thirty days 
from  the  appointed  day,  cease  to  have  effect  unless  such  contract  is,  before  the  expiry  of  that  period, 
ratified,  in  writing,  by  the  Central  Government  or  the  Government  company  concerned,  in  which  such 
undertaking has been vested under this Act and in ratifying such contract, the Central Government or such 
Government company may make such alteration or modification therein as it may think fit: 

Provided  that  the  Central  Government  or  the  such  Government  company  shall  not  omit  to  ratify  a 

contract and shall not make any alteration or modification in a contract— 

(a) unless it is satisfied that such contract is unduly onerous or has been entered into in bad faith 

or is detrimental to the interests of the Central Government or such Government company; and 

(b)  except  after  giving  the  parties  to  the  contract  a  reasonable  opportunity  of  being  heard  and 
except  after  recording  in  writing  its  reasons  for  refusal  to  ratify  the  contract  or  for  making  any 
alteration or modification therein. 

10 

 
27. Penalties.—Any person who,— 

(a) having in his possession, custody or control any property forming part of any undertaking of 
either of the two companies, wrongfully withholds such property from the Central Government or the 
Government company concerned; or 

(b) wrongfully obtains possession of or retains, any property forming part of any undertaking  of 

either of the two companies; or 

(c) wilfully withholds or fails to furnish to the Central Government or the Government company 
concerned  or  any  person  or  body  of  persons  specified  by  that  Government  or  such  Government 
company,  any  document  relating  to  such  undertaking,  which  may  be  in  his  possession,  custody  or 
control; or 

(d)  fails  to  deliver  to  the  Central  Government  or  the  Government  company  concerned  or  any 
person or body of persons specified by that Government or Government company, any assets, books 
of  account,  registers  or  other  documents  in  his  possession,  custody  or  control,  relating  to  the 
undertakings of either of the two companies; or 

(e) wrongfully removes or destroys any property forming part of any undertaking of either of the 
two companies or prefers any claim which he knows or has reason to believe to be false or grossly 
inaccurate, 

shall be punishable with imprisonment for a term which may extend to two years, or with fine which may 
extend to ten thousand rupees, or with both. 

28.  Offences  by  companies.—(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company, every person who, at the time the offence was committed was in charge of, and was responsible 
to, the company for the conduct of the business of the company, as well as the company, shall be deemed 
to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment, if he proves that the offence was committed without his knowledge or that he had exercised 
all due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been 
committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or 
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other 
officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of 
that offence and shall be liable to be proceeded against and punished accordingly. 

Explanation.—For the purposes of this section,— 

(a) “company” means any body corporate and includes a firm or other association of individuals; 

and 

(b) “director”, in relation to a firm, means a partner in the firm. 

29.  Protection  of  action  taken  in  good  faith.—(1)  No  suit,  prosecution  or  other  legal  proceeding 
shall  lie  against  the  Central  Government  or  any  officer  of  that  Government  or  the  Custodian  or  the 
Government  companies  or  other  person  authorised  by  that  Government  or  Government  companies  for 
anything which is in good faith done or intended to be done under this Act. 

(2) No suit or other legal proceeding shall lie against the Central Government or any of its officers or 
other employees or the Custodian or the Government companies or any officer or other person authorised 
by those companies for any damage caused or likely to be caused by anything which is in good faith done 
or intended to be done under this Act. 

30. Delegation of powers.—(1) The Central Government may, by notification, direct that all or any 
of  the  powers  exercisable  by  it  under  this  Act,  other  than  the  powers  conferred  by  this  section  and 

11 

 
sections  31  and  32    may  also  be  exercised  by  such  person  or  persons  as  may  be  specified  in  the 
notification. 

(2) Whenever any delegation of power is made under sub-section (1), the person to whom such power 

has been delegated shall act under the direction, control and supervision of the Central Government. 

31.  Power  to  make  rules.—(1)  The  Central  Government  may,  by  notification,  make  rules  for 

carrying out the provisions of this Act. 

(2)  In  particular,  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely,— 

(a) the time within which, and the manner in which, an intimation referred to in sub-section (3) of 

section 4 shall be given; 

(b) the form and manner in which, and the conditions under which, the Custodian or Custodians 

shall maintain the accounts as required by section 12; 

(c) the manner in which the moneys in any provident fund or other fund, referred to in section 14, 

shall be dealt with; 

(d) any other matter which is required to be, or may be, prescribed. 

(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it 
is made, before each House of Parliament, while it is in session, for a total period of thirty days which 
may be comprised in one session or in two or more successive sessions, and if, before the expiry of the 
session  immediately  following  the  session  or  the  successive  sessions  aforesaid,  both  Houses  agree  in 
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall 
thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that 
any such modification or annulment shall be without prejudice to the validity of anything previously done 
under that rule. 

32. Power to remove difficulties.—If any difficulty arises in giving effect to the provisions of this 
Act, the Central Government may by order, not inconsistent with the provisions of this Act, remove the 
difficulty: 

Provided that no such order shall be made after the expiry of a period of two years from the appointed 

day. 

33. Repeal and savings.—(1) The Hind  Cycles Limited and Sen-Raleigh Limited (Nationalisation) 

Ordinance, 1980 (16 of 1980), is hereby repealed. 

(2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed 

shall be deemed to have been done or taken under the corresponding provisions of this Act. 

12 

 
 
 
THE FIRST SCHEDULE 

[See sections 4(4), 7, 8(3) and 16(1)(a)] 

Sl. No 

Name of the Company  

Amount (Rupees in 
lakhs ) 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Hind Cycles Limited 

Sen-Raleigh Limited 

Sen and Pandit Industries Limited 

Ancillary Industries (Lugs) Private Limited 

Ancillary Industries (Forgings) Private Limited 

Ancillary Industries (Cranks) Private Limited 

Naokhali Machine Tools Limited 

241.47 

708.00 

23.96 

1.31 

1.44 

2.33 

2.87 

13 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
THE SECOND SCHEDULE 

[See sections 8(1) ] 

Sl. No  Name of the Company 

Rate  per  annum 
(Rupees) 

1. 

2. 

3. 

4. 

5. 

6. 

Hind Cycles Limited 

Sen-Raleigh Limited 

Sen and Pandit Industries Limited 

Ancillary Industries (Lugs) Private Limited 

Ancillary Industries (Forgings) Private Limited 

Ancillary Industries (Cranks) Private Limited 

8,000 

8,000 

500 

500 

500 

500 

14 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
THE THIRD SCHEDULE 

[See sections 18, 20 (1), 21(1) and 23 (1)] 

ORDER OF PRIORITIES FOR THE DISCHARGE OF LIABILITIES OF THE TWO COMPANIES 

Post-take-over management period 

Category I— 

(a) Wages, salaries and other dues payable to the employees of the companies. 

(b)  Deductions  made  from  the  salaries  and  wages  of  the  employees  for  provident  fund,  the 
Employees‟ State Insurance Fund, premium relating to the Life Insurance Corporation of India or for 
any other purpose. 

Category II— 

Principal amount of loans advanced by— 

(i) the Central Government; 

(ii) a State Government; 

(iii) Banks and financial institutions: 

(iv) any other sources. 

Category III— 

(a)  Arrears  in  relation  to  contributions  to  be  made  by  the  companies  to  provident  fund,  the 
Employees‟  State  Insurance  Fund  or  under  any  other  law  for  the  time  being  in  force  providing  for 
such contributions. 

(b)  Any  credits  availed  of  by  the  companies  for  the  purpose  of  carrying  on  any  trading  or 

manufacturing operations, other than those specified in sub-section (2) of section 5. 

(c)  Any  dues  of  State  Electricity  Boards  or  other  Government  or  semi-Government  institutions 

against supply of goods or services, other than those specified in sub-section (2) of section 5. 

(d) Arrears of interest on loans and advances . 

Category IV— 

(a) Revenue, taxes, cesses, rates or other dues to Central Government, a State Government or any 

local authority. 

(b) Any other dues. 

Category V— 

Pre-take-over management period 

(a) Wages, salaries and other dues payable to the employees of the companies. 

(b)  Deductions  made  from  the  salaries  and  wages  of  the  employees  for  provident  fund,  the 
Employees‟ State Insurance Fund, premium relating to the Life Insurance Corporation of India or for 
any other purpose. 

Category VI— 

(a) Principal amount of secured loans advanced by— 

(i) the Central Government; 

(ii) a State Government; 

(iii) Banks and financial institutions. 

15 

 
(b)  Arrears  in  relation  to  contributions  to  be  made  by  the  companies  to  provident  fund,  the 
Employees‟  State  Insurance  Fund  or  under  any  other  law  for  the  time  being  in  force  providing  for 
such contributions. 

Category VII— 

Principal amount of unsecured loans advanced by— 

(i) the Central Government; 

(ii) a State Government; 

(iii) Banks and financial institutions. 

Category VIII— 

(a)  Any  credits  availed  of  by  the  companies  for  the  purpose  of  carrying  on  any  trading  or 

manufacturing operations. 

(b) Any dues of State Electricity Boards or other Government and semi-Government institutions 

against supply of goods or services. 

(c) Arrears of interest on loans and advances. 

(d) Revenue, taxes, cesses, rates or other dues to the Central Government, a State Government or 

any local authority. 

(e) Any other loans or dues 

16 

 
 
 
 
 
 
 
 
